Different Cost associated with Quality like Assurance cost, Failure cost, Prevention cost, Rectification cost, Appraisal cost

Different costs associated with quality are as follows:

Prevention costs: These are costs incurred to prevent defects from occurring in the first place. Prevention costs include the costs of training employees, implementing quality systems, designing products and processes for quality, and conducting supplier evaluations. These costs are incurred prior to the production of a product.

Appraisal costs: These are costs incurred to ensure that the product meets the required quality standards. Appraisal costs include the costs of inspecting and testing raw materials, in-process goods, and finished products. These costs are incurred during the production process.

Failure costs: These are costs incurred when a product fails to meet the required quality standards. Failure costs can be further classified into two types:

a) Internal failure costs: These are costs incurred when defects are detected before the product is shipped to the customer. Internal failure costs include the costs of rework, scrap, and retesting.

b) External failure costs: These are costs incurred when defects are detected after the product is shipped to the customer. External failure costs include the costs of warranty repairs, product recalls, and legal liabilities.

Rectification costs: These are costs incurred to rectify the defects identified during the appraisal or failure costs. Rectification costs include the costs of repairing or replacing defective products or materials, and can also include the costs of shipping and handling.

Assurance costs: These are costs incurred to maintain and improve the quality of the product. Assurance costs include the costs of quality audits, product certifications, and ongoing training and development.

Understanding these different types of costs can help organizations identify areas where quality improvements can lead to cost savings and increased profitability. By investing in prevention and assurance activities, organizations can reduce the incidence of failure and rectification costs, and improve their overall profitability.